The U.S. Chamber of Commerce has been working hard to classify pre-settlement funding as a loan. They have been lobbying for various bills in 13 states that would essentially shut down the industry by enforcing unreasonably low rate caps. This would harm plaintiffs whose injuries have left them unable to pay their bills and unjustly enrich insurance companies, who would be able to foist lower settlements on these plaintiffs who may be desperate for money to prevent eviction or foreclosure. The latest win is pending in Oklahoma, where SB-1016 is awaiting a signature from Governor Mary Fallin, after passing with a House vote of 85-2.
When a bill was introduced in Oklahoma that essentially would have banned the pre-settlement funding industry, the American Legal Finance Association (ALFA) stepped up to the plate to work with legislators to reach an outcome that consumers, legislators, Chamber representatives, and ALFA members could be pleased with. It took months, but the loan terminology and rate cap language was removed from the bill, leaving language similar to the ALFA NCOIL model bill that provides regulation without eliminating the industry.
“It’s a really positive win for the people of Oklahoma,” said Harvey Hirschfeld, Chairman of ALFA. When Oklahoma legislators met with ALFA representatives to learn how pre-settlement funding actually helps plaintiffs and doesn’t interfere with how attorneys represent their clients, they were able to craft a bill that would be beneficial for all parties. “That was the exciting part for us,” he said.
The final version of SB-1016 lays out regulations for pre-settlement funding which mirror the best practices set forth by ALFA, including truth in advertising, complete written agreements, and not interfering with the outcome of the case. In addition, the bill also includes a provision to disclose all charges to the consumer, as well as outline a payment schedule, so that the consumer knows exactly how much he or she will owe for the term of the transaction.
“The industry … does not mind being regulated,” Hirschfeld said. “What we hope to do in the next legislative session is translate that Oklahoma bill into other bills in different states.”
After all, it’s easy for outsiders to claim that the pre-settlement funding industry gets in the way of settlements, but the truth is, many large insurance companies push plaintiffs into accepting a lower settlement than their case is worth, and the plaintiffs agree because they need to pay bills. What SB 1016 does is put more control into the hands of plaintiffs, allowing them even more transparency with their funding while still allowing them to access their settlement before the conclusion of litigation. This means that consumers will be able to continue paying their bills, avoiding foreclosure or eviction and keeping their children in college while they await compensation for their injuries.
USClaims supports ALFA’s work in crafting SB-1016 alongside the Oklahoma legislature. We are committed to a high ethical standard, clear terms and transparency in the pre-settlement funding industry. With SB-1016 now on Governor Fallin’s desk for signature, we hope this is the beginning of similar legislative collaboration throughout the country.
At USClaims, we offer pre-settlement funding, if a case is qualified for pre-settlement funding then we would purchase a portion of the proceeds of the anticipated court judgment or settlement for some cash now. USClaims only gets paid if a case is won or has reached a settlement! Apply now or call us today at 1-877-USCLAIMS to learn more.